Chesapeake Appalachia settles federal water pollution charges

A Chesapeake Energy Corp. subsidiary agreed to spend $6.5 million to restore 27 sites damaged by unauthorized discharges of fill material into streams and wetlands at its West Virginia natural gas production sites to settle charges that it violated the Clean Water Act, the US Department of Justice and Environmental Protection Agency jointly announced on Dec. 19.

They said Chesapeake Appalachia LLC also agreed under the settlement to implement a comprehensive plan to comply with federal and state water protection laws, and to pay a $3.2 million civil fine. That amount is one of the largest ever imposed for violating the CWA’s Section 404 program, which prohibits the filling or damming of wetlands, rivers, streams, and other US waters without a federal permit.

The federal government and West Virginia’s Department of Environmental Protection (WVDEP) alleged the company impounded streams and discharged sand, dirt, rocks and other fill material into streams and wetlands without a federal permit in order to construct well pads, impoundments, road crossings and other facilities related to gas extraction.

A Chesapeake Energy spokesman said the settlement represents a key milestone in resolving federal and state claims relating to surface construction activities which occurred in West Virginia before November 2010. “The company is fully committed to regulatory compliance and is working with EPA, the Army Corps of Engineers, and WVDEP to restore the impacted sites,” he said in a Dec. 19 e-mail.

The alleged violations occurred at 27 sites, including 16 which involved hydraulic fracturing, and involved about 12,000 linear ft of stream, or about 2.2 miles, and more than three acres of wetlands, DOJ and EPA jointly said.

Specific requirements

They said Chesapeake Appalachia will be required to fully restore the wetlands and streams wherever feasible, monitor the restored sites for up to 10 years to assure the restoration’s success, and implement a comprehensive compliance program to ensure future compliance with the CWA and applicable state law.

To offset the impacts to sites that cannot be restored, the company will perform compensatory mitigation, which will likely involve purchasing credits from a wetland mitigation bank located in a local watershed, the two federal entities said.

EPA said it discovered some of the violations through information provided by the public and routine inspections. Chesapeake Appalachia also voluntarily disclosed potential violations at 19 of the sites following an internal audit. EPA issued administrative compliance orders for violations at 11 sites in 2010 and 2011. Since that time, the company has been correcting the violations and restoring those sites in full compliance with EPA’s orders, the agency said.

The settlement also resolves alleged violations of state law brought by WVDEP, the two federal entities said. The state is a co-plaintiff in the settlement and will receive half of the civil penalty, they said.

A consent decree, which was lodged Dec. 19 in US District Court for West Virginia’s Northern District, is subject to a 30-day public comment period and court approval.

Contact Nick Snow at nicks@pennwell.com

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